What leaders usually conclude
The common response, once this gap is noticed, is to treat it as a discipline problem — teams are not following the process, so the process needs to be enforced more strictly, or written in more detail. Research on the relationship between formally documented work and how work actually happens suggests this response often misreads the situation. Erik Hollnagel, Robert L. Wears and Jeffrey Braithwaite, in a white paper jointly published by the University of Southern Denmark, the University of Florida and Macquarie University, distinguish between what they term work-as-imagined — the version captured in documentation — and work-as-done — the version that actually occurs in practice under real conditions. Their central observation is not that the gap between them is a failure to be closed, but that it is often the source of the organisation’s actual resilience: “Things do not go well because people simply follow the procedures and work as imagined. Things go well because people make sensible adjustments according to the demands of the situation.”
This reframes the problem. A due-diligence checklist written for a typical asset does not anticipate every atypical one, and an experienced team member who adapts it sensibly for an unusual property is not failing to follow process — they are doing exactly what keeps the platform functioning when the written version runs out. The risk is not that this adaptation happens; it is that nobody is tracking which adaptations have become routine, which means the organisation no longer has an accurate picture of how its own core processes actually operate.
A specific version of this risk worth naming directly is what happens when the person who has been making these sensible adjustments leaves or is unavailable. Their replacement, quite reasonably, follows the written process as it stands, because that is all they have. If the written process has drifted far enough from what was actually being done, the replacement’s faithful adherence to it can produce worse outcomes than their predecessor’s informal adaptation did — not because the replacement is less capable, but because they have inherited a document that stopped describing reality some time ago, without any signal attached to tell them so.
Where the gap widens fastest
This drift concentrates in the areas of a platform’s process that depend most on judgement calls too fine-grained to fully specify in writing — which is, not coincidentally, usually the areas closest to the platform’s actual investment thesis. A due-diligence process can specify a checklist of items to review; it cannot fully specify how to weigh a borderline finding against the rest of a deal’s profile, and that weighing is where the most experienced people’s real expertise lives, silently, outside the document.
Jay Galbraith’s information-processing account of organisation design points to a related mechanism: as an organisation’s activity grows more complex and uncertain, the coordination and information demands on it rise, and organisations that do not deliberately redesign how information flows — rather than simply relying on more people following the same static instructions — struggle to keep pace. A platform that scales its asset count without scaling how it captures and transmits the judgement calls its most experienced people are actually making will find that expertise concentrated in a shrinking number of people relative to the volume of decisions now needing it, which is a slower and quieter version of the same widening gap.
The gap also tends to widen faster in periods of rapid asset acquisition than in stable periods, for a straightforward reason: each new asset onboarded under time pressure is a fresh opportunity for the team to make a sensible, unrecorded judgement call, and periods of rapid growth generate many more of these calls in a shorter window than the documentation process can realistically absorb. A platform that has just completed a period of fast acquisition is, almost by construction, carrying a wider undocumented gap than the same platform would have carried after a quieter year.
None of this is unique to real estate specifically, but the investor-facing nature of the documentation gives it a weight that purely internal process gaps in other sectors do not carry — which is part of why treating it as a routine housekeeping task, rather than something worth a leadership team’s direct attention, tends to underestimate what is actually at stake.
Where this shows up
People working in real estate businesses will probably recognise this pattern first. The wider Asset and Production-Based grouping and the other sectors page show how it presents elsewhere.
Questions worth considering
- Which parts of the current documented process would surprise the people who actually execute it most often, if read carefully today?
- Where has an experienced team member’s judgement quietly become the real process, unrecorded anywhere formal?
- If that person were unavailable, what would the platform discover about what its documentation actually leaves unsaid?
- How recently has the platform been through a period of rapid acquisition that may have widened this gap faster than usual?
Your team is facing similar challenges?
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